Cryptococcus neoformans is an opportunistic fungal pathogen that causes life-threatening meningoencephalitis in immunocompromised patients. The Ca(2+)-calmodulin-activated protein phosphatase calcineurin is necessary for virulence of C. neoformans. Mutants lacking the calcineurin catalytic (Cna1) or regulatory (Cnb1) subunit fail to grow at elevated temperature and are defective in virulence and hyphal elongation. Here we isolated a multicopy suppressor gene, CTS1, which restores growth of a calcineurin mutant strain at 37 degrees C. The CTS1 gene (for calcineurin temperature suppressor 1) encodes a protein containing a C2 domain and a leucine zipper motif that may function as an effector of calcineurin. The CTS1 gene was disrupted by homologous recombination, and cts1 mutants were viable but exhibited defects in cell separation, growth, mating, and haploid fruiting. In addition, cts1 mutants were inviable when calcineurin was mutated or inhibited. Taken together, these findings suggest that calcineurin and Cts1 function in parallel pathways that regulate growth, cell separation, and hyphal elongation.